Kuwait’s Agility enters fray for logistics group Panalpina

A rival proposal could force DSV to sweeten its offer for Panalpina. (Reuters)
Updated 16 February 2019
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Kuwait’s Agility enters fray for logistics group Panalpina

  • Panalpina and Agility said that they were discussing how the two companies’ logistics operations could work together
  • The entry of Agility into the fray provides the Swiss company with an alternative to DSV’s offer

ZURICH: Kuwait-based Agility Group is talking to Panalpina over a tie-up that complicates Danish rival DSV’s $4 billion bid for the Swiss logistics group that is being fought by Panalpina’s biggest shareholder.
Panalpina and Agility said on Friday that they were discussing how the two companies’ logistics operations could work together. Agility, with 22,000 employees and $4.6 billion in annual revenue, has been expanding globally under managing director Tarek Sultan.
Panalpina added that it was still reviewing the DSV proposal “according to its fiduciary duties.”
The entry of Agility into the fray provides the Swiss company with an alternative to DSV’s offer. The Ernst Goehner Foundation, which owns 46 percent of Panalpina, has said it wants the company to be an industry consolidator, not prey for a rival.
Panalpina “is in discussions with Agility Group on potential strategic opportunities with regard to their respective logistics businesses,” Panalpina’s board of directors said in a statement. “The discussions between the two companies are at a preliminary stage.”
Agility said in a statement on its website it was “always exploring opportunities to grow” but that there are no guarantees a deal will be reached.
A rival proposal could force DSV Chief Executive Jens Bjorn Andersen to sweeten his cash-and-shares offer for Panalpina. Andersen, who said last week he remains in pursuit of a deal, has faced hurdles in Switzerland as he seeks to grow DSV’s footprint, having failed last year in his $1.55 billion bid for Swiss freight forwarder CEVA Logistics.
An analyst from Baader Helvea said Agility’s entry shows Panalpina is looking for other options beyond DSV. “We see this as another indication that the main Panalpina shareholder will not accept the current offer from DSV,” wrote Christian Obst in a note to investors.
Panalpina shares were indicated 1.7 percent lower in pre-market activity after closing on Thursday at 149 Swiss francs ($148), below the DSV offer worth about 170 francs per share.
The 20 largest freight forwarders control only about a third of the market, making the industry potentially ripe for takeovers or partnerships.


Foreign investors hope India dials back policy shocks after Modi win

Updated 24 May 2019
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Foreign investors hope India dials back policy shocks after Modi win

  • Modi’s pro-business image and India’s youthful population have lured foreign investors
  • After Modi’s win, about a dozen officials of foreign companies in India and their advisers said they hoped he would ease his stance and dilute some of the policies

NEW DELHI: Foreign companies in India have welcomed Prime Minister Narendra Modi’s election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year.
Modi’s pro-business image and India’s youthful population have lured foreign investors, with US firms such as Amazon.com , Walmart and Mastercard committing billions of dollars in investments and ramping up hiring.
India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp.
But from around 2017, critics say, the Hindu nationalist leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervor ahead of elections.
“I hope he’s now back to wooing businesses,” said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms.
“Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors.”
India stuck to its policies despite protests and aggressive lobbying by the United States government, US-India trade bodies and companies themselves.
Small hurdles
Modi was set to hold talks on Friday to form a new cabinet after election panel data showed his Bharatiya Janata Party had won 302 of the 542 seats at stake and was leading in one more, up from the 282 it won in 2014.
After Modi’s win, about a dozen officials of foreign companies in India and their advisers told Reuters they hoped he would ease his stance and dilute some of the policies.
Other investors hope the government will avoid sudden policy changes on investment and regulation that catch them off guard and prove very costly, urging instead industry-wide consultation that permits time to prepare.
Protectionism concerns “are small hurdles you have to go through,” however, said Prem Watsa, the chairman of Canadian diversified investment firm Fairfax Financial, which has investments of $5 billion in India.
“There will be more business-friendly policies and more private enterprise coming into India,” he told Reuters in an interview.
Tech, healthcare and beyond
Among the firms looking for more friendly steps are global payments companies that had benefited since 2016 from Modi’s push for electronic payments instead of cash.
Last year, however, firms such as Mastercard and Visa were asked to store more of their data in India, to allow “unfettered supervisory access,” a change that prompted WhatsApp to delay plans for a payments service.
Modi’s government has also drafted a law to clamp similar stringent data norms on the entire sector.
But abrupt changes to rules on foreign investment in e-commerce stoked alarm at firms such as Amazon, which saw India operations disrupted briefly in February, and Walmart, just months after it invested $16 billion in India’s Flipkart.
Policy changes also hurt foreign players in the $5-billion medical device industry, such as Abbott Laboratories, Boston Scientific and Johnson & Johnson, following 2017 price caps on products such as heart stents and knee implants.
Modi’s government said the move aimed to help poor patients and curb profiteering, but the US government and lobby groups said it harmed innovation, profits and investment plans.
“If foreign companies see their future in this country on a long-term basis...they will have to look at the interests of the people,” Ashwani MaHajjan, an official of a nationalist group that pushed for some of the measures, told Reuters.
That view was echoed this week by two policymakers who said government policies will focus on strengthening India’s own companies, while providing foreign players with adequate opportunities for growth.
Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one offical of a US tech firm saying, “I’d rather be more worried than be optimistic.”